Progressive Capitalism by David Sainsbury: A new centre ground is being forged

This book is equally important for what it says and for who is saying it. A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is sensible and mainstream.

Progressive Capitalism: How to Achieve Economic Growth, Liberty and Social Justice
David Sainsbury
Biteback, 256pp, £20

This book is equally important for what it says and for who is saying it. The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream; and nothing symbolises this more than that David Sainsbury, the epitome of the progressive mainstream since his days in the vanguard of David Owen’s SDP in the 1980s, should be making it.

It is a powerful and cogent critique. Sainsbury was an effective science minister under Tony Blair who greatly increased state support for science. However, he writes: “It was only after I left government . . . that I began to question fundamentally the neoliberal political economy which had dominated governments in the western world for the last 35 years.”

Partly this was because of the 2008 crash and a growing conviction that competitiveness required a “race to the top” – not neo - liberalism’s “race to the bottom” – with state support for employment, innovation and skills. But there was also a telling personal dimension: the private equity takeover bid for his family firm, Sainsbury’s, in the summer of 2007. “There was not the slightest pretence of trying to improve the performance of the company,” he claims. The bidders proposed “to sell off all the properties and replace them with massive debts. Then they would put the company back on the market . . . and walk away with £1bn of profit.” The City was wildly keen, salivating at the £100m in fees the investment banks stood to earn: “a perfect example of wealth appropriation as opposed to wealth creation”.

The policy prospectus set out in the second half of the book is a must-read for anyone seeking to make sense of that new catchphrase “active industrial policy”. Sainsbury recommends far-reaching reform of equity markets to foster the creation and expansion of companies rather than their destruction and foreign takeover; a “national system of innovation” with the state as a key player; and a revolution in technical and vocational education that emulates German strength in these areas, although he warns against copying Germany glibly.

On equity markets, he favours a big cut in the fees paid to investment managers and a new “Shareholders’ Advisory Board” to promote “an understanding of the fundamental value of the companies in which [the City] invest[s]” rather than their short-term trading value. Investment managers should also get far more involved in the governance of the companies they own, including the appointment of directors and holding them to account, and constrain the boardroom pay explosion which shows little sign of abating. A wildly overpaid City breeds a wildly overpaid corporate sector.

Sainsbury is especially bold on takeovers. He proposes higher “hurdles” in shareholder support required from within the target company, and restrictions on those who can vote to those who have held shares in the target company for “a certain number of years”. This goes way beyond the 2012 Kay review of equity markets and long-term decision-making.

On innovation, Sainsbury supports the coalition’s establishment of Catapult Centres – national technology and innovation hubs in key industrial sectors, starting with highvalue manufacturing – but he favours more support for new technologies. Government departments should have “embedded R&D units” to promote technology and innovation on a strategic long-term basis; and regional development agencies – abolished by the coalition in 2010 – should be restored “in parts of the country which need them”.

A dramatic increase in the supply of technicians, especially with engineering skills, is Sainsbury’s goal for a revamped education and training system. Kenneth Baker’s new breed of university technical colleges for 14- to-19-year-olds should be expanded and local industry integrated in the management of further education. Some would go further and seek to introduce an English equivalent of Germany’s “dual system”, whereby employers and local authorities take joint responsibility for a system of mass apprenticeships with highquality vocational training alongside. But Sainsbury does not think this feasible because of the weakness of Britain’s chambers of commerce, trade associations and trade unions in comparison with Germany.

Sainsbury would pioneer reform through an “enabling state”, rather than through a return to “command and control”. But an enabling state is not a smaller state. “A first task of progressive politicians is to persuade people of the importance of competent and active government, standing above sectional interests,” he writes. This, conceptually, is a return to mainstream social democracy after its partial abandonment in recent decades. It cannot be achieved without a transformation in the capabilities of government, including a new national economic council and a much more purposeful civil service.

Sainsbury also puts in a heartfelt personal plea, from a public-spirited party donor caught up in party funding controversies, for state funding of parties so that governments of both parties are better able “to stand up to the financial power of interest groups”, be they trade unions or investment managers and bankers.

A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is pretty sensible and mainstream. A new centre ground is being forged.

Andrew Adonis is the author of “5 Days in May: the Coalition and Beyond” (Biteback, £12.99)

The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream. Photograph: Getty Images.

This article first appeared in the 20 May 2013 issue of the New Statesman, The Dream Ticket

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How the death of a militant in Kashmir went viral

Burhan Wani was a 22-year-old Hizb al-Mujahedin commander. In life, he resuscitated the flagging insurgency. Now, his death has put it on a firm road to revival.

His photographs began to circulate on Facebook last year. In one, he leans against a cedar tree in a forest in southern Kashmir, a Kalashnikov slung over his shoulder. In another, he stands before lush green mountains under a cloudless sky.

But the picture that created the myth of Burhan Wani, the 22-year-old Hizb al-Mujahedin commander, was a group shot with ten armed associates standing around him. They faced the camera calmly, a hint of a smile tugging at their lips. The photograph went viral, not only in Kashmir but also across India and Pakistan.

On 8 July, when Wani and two other rebels were shot dead in a joint operation by the police and paramilitary forces, thousands of people across southern Kashmir took to the streets to mourn and protest. The mosques reverberated with slogans of freedom – a throwback to the late 1980s, when armed struggle against Indian rule broke out in the region. The protesters lobbed stones. The police fired back.

The following morning, news of protesters’ deaths started to emerge. The injured, numbering in their hundreds, began to reach the hospitals in Srinagar. Many had been hit in the eyes with pellets from pump-action guns, non-lethal weapons used for crowd control in Kashmir since 2010.

The eye doctors at Sri Maharaja Hari Singh Hospital said that more than a hundred people had been partially or completely blinded. Among them was a 14-year-old schoolgirl, Insha Malik, who lost the vision in both eyes. A picture of her pellet-riddled face has become the symbol of the ongoing mayhem.

The fury soon spread across Kashmir. Mosque loudspeakers boomed with slogans and songs calling for resistance against India. Apart from the government-owned broadband service, internet and mobile-phone networks were shut down. Yet this made little difference. Roughly sixty people – many of them teenagers – have lost their lives. According to figures presented to parliament by the Indian home minister on 11 August, 4,515 security personnel and 3,356 civilians have been injured in the protests.

What made Burhan Wani important enough to warrant such widespread mourning and anger? The answer is tacitly understood in Kashmir but little articulated. In his six years as a rebel, Wani revived anti-India militancy from near-extinction. His strategy was primarily tech-driven – according to police in Kashmir, he hadn’t fired a single shot.

The image of a handsome young man in battle fatigues against a pastoral backdrop, calling for a new attempt at jihad against India, held a powerful appeal for a young generation in Kashmir. These are the people who are enduring the fallout of more than two decades of separatist insurgency, and they are bitter about New Delhi’s oppressive hold over their homeland. With his fresh, viral image, Wani separated his movement from Kashmir’s history and bestowed a new moral glamour on their actions.

He was soon joined by scores of recruits. In 2015, for the first time in a decade, local militants outnumbered outsiders. This year, out of 145 active rebels, 91 are from Indian-administered Kashmir and most of the rest are from Pakistan or Pakistan-administered Kashmir (though this is still a far cry from the early 1990s, when thousands of militants, both local and from elsewhere, roamed the valley). The recruits – many of them home-grown, Wani-inspired youths – are replenishing the ranks as others are killed.

As the ongoing turmoil shows, Wani long ago transcended his modest militant credentials. He has become an emblem of Kashmir’s deepening alienation from India and a role model for young people for whom guns seem to be the only route to a better future.

In life, he resuscitated the flagging insurgency. Now, his death has put it on a firm road to revival. Unlike during the mass uprisings of 2008 and 2010, Kashmir today is drifting back to active militancy, with the myths about Wani enlivening the separatist narrative.

“You will kill one Burhan; thousands of Burhans will be born”, one slogan goes. “Burhan, your blood will bring revolution”, promises another. The millennial generation has little memory of the horrors of the 1990s, of the innumerable killings and disappearances. An estimated 60,000 people have been killed in the armed rebellion against New Delhi, in part aided by Pakistan (which claims Kashmir as part of its territory, in a dispute that stretches back to the 1947 partition of India). Human rights groups put the number of enforced disappearances in the present conflict at 8,000.

Contributing to this mood are India’s rightward turn under Prime Minister Narendra Modi and the perception that New Delhi wants to forcibly change the demographics in Kashmir. This fear has been reinforced by recent government measures to set up colonies to be settled by Indian soldiers and Kashmiri Pandits – the latter from a small Hindu community that was forced to flee the region during the separatist violence.

At Wani’s funeral on 9 July, all eyes were on a group of masked rebels in the front row. They fired their guns in salute to their fallen chief. When prayers ended, the mourners strained to catch a glimpse of Wani’s comrades. Those who were close enough kissed them on the forehead before they escaped.

More than a month later, the anger on the streets shows no sign of abating. Protests take place daily across Kashmir. Businesses are shut down for most of the day, opening only briefly late in the evening and early in the morning. Internet access is restricted, except through the state-owned broadband. With each week of disturbances, the numbers of deaths and injuries continue to mount.

Meanwhile, a new video has appeared on Facebook and YouTube. This time, it comes from Sabzar Ahmad Bhat, Wani’s successor. Again, it shows a commander and his associates in battle fatigues, in a forest in southern Kashmir. Bhat waves to the camera as the others remain engrossed by their phones. It, too, has gone viral. 

This article first appeared in the 18 August 2016 issue of the New Statesman, Corbyn’s revenge